Category: Market News

Chukka Caribbean Adventures recently disclosed its intention to list on the Jamaica Stock Exchange. The news came just as the company reported it will be expanding into two more regional markets as well as improving its service offerings in Jamaica.

Chukka recently issued a $2 billion dual currency bond in order to refinance its debt and fund its expansion. The bond was arranged by Sygnus Capital, who on Wednesday opened its own IPO, and Sagicor Investments Jamaica. The Jamaican dollar portion of the bond has a fixed coupon of 8.50 percent while the U.S. dollar portion has a fixed coupon of 6.50 percent and will mature in five years. There will be a quarterly interest payout on the bond. Chukka currently has a debt of just over 10 per cent and the company is hoping the bond will yield savings of 25 to 30 percent on interest costs.

Chukka is looking to expand its partnership with Carnival Cruise Line whose bigger ports will serve as an advantage to Chukka. Locally, Chukka has been improving its offerings at different locations. The company has adventure tours in St. Lucia, Belize, Turks and Caicos and Jamaica. Chukka Jamaica has seven locations across Jamaica’s North Coast including Negril. In recent times, there has been expansion of a water park, bar and restaurant at its Trelawny location late last year and the addition of a zip line at the Dunn’s River location costing USD$2 million and USD$1 million respectively.

Chukka expressed satisfaction stating that the demand for the bond on the market was high and the interest rate was even more competitive. The company hopes to forge meaningful and beneficial relationships with institutional investors as they continue to explore financing options for growth.

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Amazon.com, Inc (NASDAQ: AMZN) has been rolling out new efficient measures, which have been threating to areas such as delivery affecting FedEx and UPS sales. In addition, Amazon intends to rollout a new payment system to offer retailers discounts from credit card fees, which could affect big names such as Paypal Holdings Inc., JP Morgan Chase & Co., Citi Group Inc., Mastercard Inc. and Visa Inc. to name a few.

Swipe fees are a USD$90 billion a year business for companies such as JPMorgan Chase & Co. , Citigroup Inc., and networks such as Mastercard Inc. and Visa Inc. and payment processors like First Data Corp. and Stripe Inc., who earn a portion when customer swipe their cards or click “buy now”. Furthermore, credit card transaction fees amount to about 2 percent and .24 cents for debit cards, but big stores such as Amazon and Walmart have negotiated for lower rates based on their large sales volume daily. However, Amazon is willing to forfeit profitability for a long-term gain acting as a so-called payments facilitator like Paypal by exporting or offering to pass this discount to its merchants who agree to take on the Amazon Pay service.

As a result, this means Amazon will group its smaller merchants to help them reduce the cost of accepting electronic payments. Furthermore, since Amazon’s announcement, Paypal shares dropped 4.1 percent on Wednesday, erasing most of its gains of 3.7 earlier in the year. Visa also fell 0.9 per cent.

Moreover, The drawback to this is that many small merchants are sceptical about divulging certain information with Amazon, which may compete with them to sell similar products on its own site. Amazon operations’ main intention is to get a piece of other retailer’s e-commerce revenue to becoming the ultimate one-stop shop.

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Cambridge Analytica has finally stepped out to deny allegations made against them in the case of widespread misuse of data from millions of Facebook accounts. Cambridge Analytica held its first news conference since allegations surfaced that the Facebook data was used in the aiding of Donald Trump win in the 2016 presidential election, which was represented by Clarence Mitchell, the company’s publicist.

After months of allegations resulting in salacious scandals, Cambridge Analytica’s reputation is still being dragged through the dirt. This has resulted in even the CEO of Facebook Mark Zuckerberg, having to publicly apologise for his company’s wrongdoing especially where privacy policies being questioned.

Furthermore, Mitchell went on to say The company has been portrayed in some quarters as almost some Bond villain, in which he said, Cambridge Analytica is no Bond villain. Also, in denying the claims of having nothing to do with Facebook’s Data aiding Trump’s campaign and even Brexit campaigns, Mitchell stated that the data collected from Facebook was gathered by another company, who had contractual obligations but, deleted such data when the uproar started.

Facebook’s share price had been taking a head-on blow having gone down to as low as USD$150.00 per share and the losing almost USD$50 billion in value for its shareholders.

On the contrary, a former employee of Cambridge Analytica, Christopher Wylie also made claims that the company has connections to the successful campaign such as taking Britain out of the European Union.

Moreover, Mitchell is adamant that Cambridge Analytica did not break any laws, but has admitted to ordering an independent investigation because, he insists the company is being victimised with wild speculation based on misinformation, misunderstanding, or in some cases, frankly, an overtly political position.

Also, Mitchell stated that to think political consultancies can use data to influence votes is “frankly insulting to the electorates. Data science in modern campaigning helps those campaigns, but it is still and always will be the candidates who win the races”.

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It is fair to say many investors got cold feet and panicked since the data privacy scandal, dubbed the Cambridge Analytica Scandal, made the news on March 19. In an effort to minimize their loss, some investors sold shares in Facebook causing the stock to decrease in value by 14 per cent since that time. Many persons feared that the stock price would spiral downwards as usership would decline and tighter regulations would cost the company.

On the contrary, it did not. Facebook released its earnings report on Wednesday and it was better than predicted. Monthly active users in the first quarter increased by 13 per cent compared to the same period last year, totalling 2.2 billion users. Daily active users in the U.S and Canada, increased from 184 million users last quarter to 185 million users this quarter. Net income rose to USD$4.99 billion or USD$1.69 per share from USD$3.06 billion or USD$1.04 per share in 2017. Revenue was even better than expected, totalling US$11.97 billion from an estimated US$11.41 billion.

These are positive results for the world’s largest social network which has been surrounded by negative news for weeks about the role the company played in the recent elections, divulging personal information about its users. Facebook generates revenue by selling advertisements which is personalized to each user based on search history, age, gender, interests and friends list.

Coming from the scandal, Facebook could see increased regulations which may decrease ad profits as data used to target ads to users will have to be reduced. However, based on how the market responded on Wednesday, it is clear Facebook is in a good position to cope with regulations and the company will indeed get through this. The stock now trades on the NASDAQ at USD$159.69.

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Lockheed Martin Corporation [NYSE: LMT], on Tuesday, fell by 6.1 per cent to USD$336.49 as the weapons supplier failed to raise cash flow projections for 2018. A little puzzling and disappointing for investors as the company is the number one weapons supplier to the U.S. government who recently spent far more on defense than they did in the previous year.

Lockheed recorded modest profits in its first quarter review and even surpassed estimates from analysts. In light of this, Lockheed raised its 2018 forecast. Additionally, the company experienced increased sales of the F-35 combat jets. Lockheed, however, blames pension contribution for which it stated caused “negative cash from operations in the second quarter.”

The annual cash flow forecast was the only aspect of the company’s financials which was not revised higher. Lockheed is however optimistic that the outlook for cash flow may change as “it is still early in the year and cash is trickier to predict.”

Controversy is seemingly affecting the company’s ambition to raise its financial outlook for the coming quarter as news surfaced of the US Department of Defense having stopped the delivery of the F-35 jet disputing a production error and the responsible party. The F-35 jet is responsible for about a quarter of Lockheed sales and without it the company’s growth potential may be significantly impacted.

In 2018, Lockheed projects that the company will make revenue between USD$50.35 billion to USD$51.85 billion compared to its previous forecast of USD$50 billion to USD$51.5 billion. In the first quarter of 2018, which ended March 25, Lockheed made net income of USD$11.16 billion compared to USD$789 million for the same period in the previous year. Net sales increased by 4 per cent from USD$11.21 billion to USD$11.64 billion.

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As you probably know already, Retirement is when a person’s work life comes to an end after they have either accomplished all they need to financially or have reached the legal age to do so. However, some do not take this period in their lives as seriously as they should, thus not putting the proper measures in place to secure their future.

One downfall of persons is that they do not start making steps in saving for retirement until they are close to the age. This should not be so, as a pension plan alone is highly unlikely to be able to sustain someone, let alone allow them to live comfortably after.

According to the Senior Manager at JN Bank, Sharon Smith, good management of your money on a monthly basis is very vital in planning for retirement. As early as earning our first pay cheque we should be thinking about how we will be able to save toward a comfortable retirement and not only about the next party, hotel or country we’re headed to.

This isn’t to say that people shouldn’t be enjoying their lives doing what they love; but there should always be balance and priorities. Going to one less party for the month and redirecting the money that would have been spent, towards an SSL Brokerage account is one way to contribute towards your pension plan. It is not about the age we are at now, it is about the age of retirement and the growth we want to achieve.

Saving through a pension scheme is actually a lot better than people may think. For one, you cannot benefit from it until you have retired, unless there is a serious need for it like health issues. Secondly, the one that will catch person’s eyes, is the fact that it is taken out of your salary before PAYE is deducted, which then lowers your tax threshold. We all know that persons wish they were taxed less.

There are many other ways to make investments to add to pensions savings, like investing in real estate to earn income from rentals or even investing in stocks and bonds that give income, growth for your capital and also preserve your capital. The younger you are the more aggressive you can be, investing in more growth stocks so that your money can expand. As you carry on in age, you can then shift your focus on stocks and bonds that give both income and growth, which generally fluctuates around the same price level so there is no loss in capital.  Lastly, when you are very close to retirement or even in retirement, you of course would not want to take on the risk of losing all you have earned or saved, which oftentimes results in you being a more conservative investor; looking into more bonds than stocks that give good yields and also preserves capital.

Investing is not always easy nor is it always safe, but it is always worth a try. The majority of wealthy persons today have some form of investment.

Don’t you want to be like them so you can travel the world, live comfortably and not have to be dependent on the state that does not even provide enough to sustain anyone?

We still see elderly persons on the street trying to make ends meet, selling produce or even goods. At that age you should be relaxing at home, babysitting your grandchildren or even travelling to places you have never been.

Retirement age in Jamaica is 65 years old. Take retirement seriously! Start saving and investing now!

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We must all remember September 2017 when news emerged of a Trinidad based company called ANSA McAL which offered to acquire shares of minority shareholders of Berger Paints, through its subsidiary ANSA Coatings International. ANSA offered to buy each unit for JMD$10.88 despite the value per share being at JMD$11.60 at the time. Unfortunately Ansa only received JMD$6 million of the JMD$105 million units they had requested and the stock was not qualified to be delisted.

Many rejected the offer as it was seen as unfair and minimal, which was right as the stock was valued more than the JMD$10.88 they offered and even more now that it last traded on the Jamaica Stock Exchange at JMD$19.10.

Directors at Berger Paint Jamaica thought otherwise. They highly recommended that shareholders take up the offer which they described as a fair price. A few of the directors along with a few employees stated they would accept the offer, according to Berger Paint. However, after releasing its annual report in December 2017, it was revealed that all the directors of Berger Paint Jamaica still had all their shares listed and only one employee sold her shares.

It was later reported that the registrar did not receive the forms of acceptance from the directors during the application period. The directors, however, are adamant that they did in fact submit the acceptance forms but the applications are no where to be found. Shareholders are now questioning the poor judgement of the directors who were tasked to protect their interest but instead ill- advised the minority.

In its financial statement ending December 2017, Berger Paint Jamaica reported revenue of JMD$1.9 billion, a 21 percent decrease from JMD$2.4 billion the previous year. Net profit also took a hit, down by 45 percent from JMD$316 million to JMD$174.1 million.

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First Caribbean Bank (FCIB) has withdrawn its registration to list its shares on the New York Stock Exchange (NYSE). The bank, which has its headquarter in Barbados, explained on Thursday that the submission has been withdrawn due to ‘market conditions’ in the US. It did not specify the US ‘market condition’ it was troubled by.

First Caribbean Bank filed a registration for its IPO, with the symbol FCI, in December 2017. In its prospectus to potential investors, FCIB indicated the growth the company has achieved over the years. It made mention of the growth in markets in Jamaica, Trinidad and the Dutch Caribbean. An example was provided of the company’s loan book which grew by double digits in Jamaica, compared to the other banks whose loan books grew by single digits in 2017. Growth was also mentioned in retail banking and investment banking.

It was reported that First Caribbean Bank (FCIB) withdrew its application to list, the same day the New York Stock Exchange notified the United States Securities and Exchange Commission that the IPO was approved. FCIB had made changes to its registration statement stating the company would offer 9.6 million common shares between USD$22 and USD$25 and also that it intended to sell 1.4 million common shares outside the IPO.

For the financial year ending October 2017, FCIB reported net income of US$151.3 million from US$143 million two years before, a 6 percent increase. FCIB holds US$12 billion in assets in 2017 compared to US$11 billion the previous year, with a market capitalization of US$2 billion. Total revenue for 2017 was USD$547.4 million compared to USD$533.8 million; a 3 percent year over year increase.

First Caribbean Bank (FCIB) is not the first Caribbean based bank to withdraw its IPO registration on the NYSE. In 2013, NCB Group aborted its IPO and had to absorb $680 million in costs relating to financial fees. The bank has however recovered significantly from that situation as it has reported record profits in 2017.

Could FCIB be withdrawing its registration because of market volatility in the U.S.?

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Morgan Stanley (NYSE: MS) reported a stellar first quarter with all segments delivering record revenue growth. When combined the company achieved an USD$11.1 billion revenue increase for the first time when compared to USD$9.7 billion a year ago. Also, corporate tax cuts also aided in its stellar performance.

Morgan Stanley saw robust increases in its institutional securities net revenues of USD$6.1 billion compared to USD$5.2 billion, reflecting strength across its sales and trading segment which rose to USD$4.4 billion from USD$3.5 billion. Furthermore, the company’s investment bank segment which is ranked #1 in completed mergers and acquisitions and global equity so far this year with the use of data compiled by the Bloomberg saw an increase of USD$1.5 billion in comparison to the USD$1.4 billion reported in the prior year.

In addition, pre-tax income helped to drive this stellar performance with an increase of USD$2.1 billion from USD$1.7 billion one year ago. Wealth Management reported net revenues of USD$4.4 billion when compared with USD$4.1 billion a year ago.

This is due to an increase in pre-tax income from continuing operations of USD$1.2 billion compared to 973 million last year. Besides, Asset management reported a rise of USD$2.5 billion from USD$2.2 billion a year ago, reflecting higher asset levels and positive flows.

Investment Management which recorded the smallest increase but, nonetheless noteworthy of USD$718 million from USD$609 million due to higher management fees and continued positive long-term net flows in the quarter. Moreover, MS also reported March 31, 2018, an increase in its total assets under management of USD$469 billion compared with USD$421 billion a year ago.

Also, James P. Gorman, Chairman and Chief Executive Officer, stated, We delivered powerful results this quarter, with record revenues and net income – and an ROE above our target range. Each of our businesses performed well, with significant client engagement across our global franchise, and Sales and Trading a particular highlight in a more active environment.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in more than 41 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals.

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Recently, we have seen an increase in the number of companies reporting record profit and sales in the history of the Jamaica Stock Exchange (JSE) and Lasco Distributors Limited (LASD) is no different. For the financial year ending March 31, 2018, LASD reported the highest net profit in the history of the company of JMD$1.004 billion. This is a 65 percent increase in profit compared to JMD$609.68 million in 2017.

LASD attributes its performance to successful strategies, growth in its key business categories, management of margins, cost efficiencies and proceeds from the ongoing Pfizer case. The company’s successful strategies include an expansion in the market, cost efficiencies, the development of new products and a strong management and operational team.

The development of new products was seen in the third quarter when the company produced an adult energy drink called Konka and a carbonate beverage called Lyrix. According to LASD, they both received favourable response from consumers. The products were manufactured by affiliate Lasco Manufacturing Limited. Additionally, during the financial year, LASD launched a healthier version of the LASCO Food Drink by reducing its sugar content by 50 percent. Its liquid beverage, iCool, sugar content was also reduced.

Lasco received JMD$273 million paid in damages and interest in the Pfizer case during the financial year but the company says it expects to receive more money and has since filed an appeal with the courts.

A total of JMD$16.3 billion was earned in revenue, an increase of 3.16 percent from the JMD$15.8 billion earned in 2017. Total assets for the year increased by 15 percent from JMD$7.4 billion in 2017 to JMD$8.5 billion in 2018.

The stock currently trades at JMD$4.00 on the JSE and we at SSL continue to recommend Lasco Distributors Limited to our clients.

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Medical Disposables and Supplies Limited, a healthcare and consumer products distributor based in Kingston, Jamaica, has reported over JMD$2 billion in revenue for the financial period ending March 31, 2018. This is the first for the company which is listed on the Junior Market of the Jamaica Stock Exchange. Medical Disposables began its operations in 1999 on a small scale and today, are able to celebrate record revenue numbers.

The company has inventory ranging from pharmaceuticals, vaccines, injectables, to beauty items. Its brands are displayed and sold in health and personal care stores islandwide.

Medical Disposables and Supplies reported an increase in revenue of 19.3 percent, up from JMD$1.71 billion in 2017 to JMD$2.05 billion in 2018. The company attributes this exceptional performance to the increase in product offerings, price increases and growth in new consumer business segment.

Gross profit, although still impressive, was affected by JMD$8.8 million worth of expired products which were written off during the financial year. Therefore, gross profit only increased by 12.4 percent to JMD$461.5 million in 2018 compared to JMD$410.7 million in 2017.

Total assets grew by 21.4 percent from JMD$1.214 billion in 2017 to JMD$1.474 billion in 2018.

The company reported that its liquidity position is still healthy and because of this it will continue to capitalize on reinvestments in order to continue developing.

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Crime has plagued Jamaica at a higher level since the start of 2018. As a means to combat this issue, the government has implemented a State of Emergency in areas that recorded the highest murder rates, causing a ripple effect throughout the economy as different sectors were significantly affected by the crime surge and increased security presence across the island. News of the state of public emergency in St James resulted in fewer tourist arrivals, according to Jamaica Tourist Board for February 2018. While the new security detail was welcomed by residents, the current state of affairs has proven to be wrong for businesses in and around the affected parishes. Specifically, Knutsford Express [JSE: KEX], whose earnings declined for the third quarter of their fiscal year. Managing, Director Oliver Townsend, reported that this could be attributed to the lockdown that the parish of St. James has been under for the past four months. The company has been recording remarkable growth but ended with an increase of only 14% in revenue for the three-month period ending February 28, as opposed to the rise of 18% that they saw in the previous quarter.

Regardless of this decrease, Knutsford Express [JSE: KEX] has tried to mitigate any further loss in value to their share price that could be induced by decline in investor confidence, by showing significant effort in the expansion of the business through new investments.

For the quarter in question, the company reported a 24 percent increase in total assets, through the acquisition of additional buses that will take on new/ other routes across the island. They also established a depot at the Donald Sangster International Airport which added to passenger growth. Furthermore, they are set to expand their Kingston terminal to include a new entity, “Knutsford Connect”, which will provide airport transfers to have a car rental for passengers and a high-end, luxury transfer service for corporate clients.

Publicly traded companies can highly benefit from benchmarking aspects of Knutsford’s business strategy. Businesses underestimate the power of market sentiment and how it can seriously affect share value. Regardless of the loss incurred by an external factor that they have no control over, the company sought to reassure their shareholders by displaying why their confidence should not be swayed due to a reduction in revenues. Both existing and potential shareholders need to see evidence of how their capital can gain value in times to come, and Knutsford Express has shown the potential to generate massive growth in months to come, owing to their present investments.

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In recent news, it was announced that the Financial Sector Adjustment Company or FINSAC was interested in abandoning their interest in Ciboney Group Limited [JSE: CBNY] by the sale of their shares.

The company is currently inactive, but the line of business had included acquisition, development and rental of resort properties. However, due to debt issues, the company was forced  to sell off their assets for repayment. All but one was sold.

Ciboney currently has one piece of land on the south coast, very close to the Sandals Whitehouse resort in Negril which is now up for sale once again. It is described as beachfront property, a little over 16 acres, suitable for the construction of villas or a residential area and is valued anywhere between JMD$200- 250 Million. Investors are invited to bid for this piece of land.

Most importantly, FINSAC has majority interest in Ciboney through three other companies. They have invited interested investors to submit their offers for acquisition of its entire shareholding on April 30, 2018. If a purchaser is found and the transaction is successful, majority ownership of the company will be diverted from Finsac to the successful party within Q1 of the new financial year beginning on June 1, 2018.

This majority stake transfer can be somewhat of a good sign for Ciboney. This shifts management and decision making to another party or entity that can make positive changes for the company. It can enable the company to restore operations and allow for a 360-degree turn.

SSL is currently not bullish on CBNY; we do not recommend investors to buy. However, we must watch to see who acquires the company and what this move will do for the company’s lifespan, spare price and overall business.

The current bid and offer of CBNY are $0.12 and $0.14 respectively.

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Wells Fargo and Company may have to fork over $1 billion in settlement to regulators in order to resolve an investigation with regards to the sale of some of its auto insurance and mortgage products. The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency were preparing the hefty fine on Monday.

This is not the first regulatory issue Wells Fargo has had to deal with in just under two years. In 2016, there was an investigation into branch employees who had opened millions of accounts without the knowledge of customers. The Federal Reserve has already imposed sanctions on Wells Fargo for failing to have sufficient risk controls to detect these issues. One such sanction is the restriction on the growth of the banks balance sheet beyond 2017 levels of $1.95 trillion, until measures are implemented to address the bank’s board and risk management. The restrictions will significantly affect the company’s annual profit by more than half to US$300 million. Mishaps such as these, reduces customer’s trust and confidence in the bank and its sales tactics in various departments such as auto insurance, wealth management and mortgage.

Despite the developments, the bank reported a 5.5 percent increase in profit for the first quarter of 2018, with net income of US$5.9 billion or US$1.12 per share, compared to US$5.6 billion for the same period in 2017 or US$1.03 per share. Revenue, however, fell by 2 per cent to US$21.9 billion from US$22.3 billion. Average deposits decreased by US$2 billion to US$1.3 trillion while average loans decreased by US$12.6 billion or 1 per cent to US$9.51 billion.

These results may however need to be revised to reflect the final settlement from regulators. Many may argue that  US$1 billion fine may not have a significant impact on the company’s balance sheet but there is no doubt that it may take some time for the bank to repair its bruised reputation. This is evident in its shares which have already fallen to US$50.89, down 3.4 percent after trading on Friday.

Wells Fargo has already taken measures to prevent these unfortunate occurrences by revamping its operational structure. The bank made changes to its board and hired a new compliance officer.

Wells Fargo may be having a hard time now, but the company is known for making profit and appeasing its customers and that is why we at SSL continue to recommend this stock to our clients.

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Main Event Entertainment Group Limited [JSE: MEEG] at its first annual general meeting since listing announced the creation of a new division called the M-Style which will aim to provide seating and equipment for events such as weddings, conferences and birthday.

With this new initiative M-Style, Main Events will see a decrease in the number of third-party contractors it usually needs for the proper execution of its events.  Complementing the company’s entertainment and marketing function by creating a new “experience” as stated by CEO Solomon Sharpe.

Furthermore, M-Style is already in full operation but, yet to be formally launched. Sharpe stated, “Previously, Main Event could not have necessarily played in the wedding market,” because the company was unable to provide that type of décor to create the “elegant” seating to cater to such events.

MEEG projects an investment of 100-150 million in equipment for 2018 which would aid in the expansion of their offerings and internal resource which is a significant part of the company’s strategy to offer a full-service solution to existing and prospective clients across the region.

The Company achieved record revenue of $1.18 billion as at the end of 2017 financial year, an increase of 4.42 percent comparing to $1.13 billion in 2016. Operating profit rose to over 80 percent at $108 Million in 2017 compared to $59.8 Million a year earlier. The net profit margin increased in the same period by 78.85 percent to $101.047 Million from $56.499 Million.

Moreover, Main Event has started 2018 with a good momentum having aided with the execution of major events such as Inter-Secondary School Sports Association (ISSA) Boys and Girls Championships and ‘soca’ parties including the Carnival road march.

Currently, Main Event Entertainment Group Limited is trading at a price of JMD 6.19, and we at SSL recommend a definite buy for this stock.

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Sanctions by the U.S. on Russian businesses and officials, had a negative impact on the Russian rouble as it fell by more than 4 percent against the dollar this week.

Investors lost their confidence and sold their assets as they feared more sanctions could be imposed which would increase market risk.  The sanctions imposed were narrowed down to two reasons:

The first being the U.S.’ response to allegations that Russia interfered in the 2016 U.S election. The other being another allegation that the Russians are responsible for the poisoning of Russian ex-spy, Sergei Skripal and his daughter.

If the U.S. keeps targeting Russia, then this may pose a political issue for Russia, whose President, Vladimir Putin, was recently re-elected. The Russian economy is in a state of recovery, and these sanctions may worsen the issue as the Russian government will have to spend money budgeted for other tasks, to bail out sanctioned Russian companies.

However, Russia is optimistic this current rouble depreciation is temporary. Even Russian businesses are refuting the claim that a decrease in the value of the rouble has affected operations.

Russia is preparing to act if there are risks to the country’s fiscal stability. One such response would be to resume foreign currency repo operations if necessary. Consideration will even be given to possible retaliation against the U.S.

After a 1.5 percent increase in the Russian economy in 2017, a floating rouble rate could have an adverse effect on the Russian economy which was projected to grow by 2 per cent in 2018.

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Microfinance Company, ISP Finance Services Limited, has blamed the appreciation of the Jamaican dollar against foreign currencies for the decline in foreign exchange gains in the company. Foreign exchange earnings decreased by $5.83 million in 2017 totaling a meagre $934,543 compared to $6.76 million in 2016.

On a more positive note, ISP Finance reported $261.95 million dollar in revenue for 2017 compared to $219.70 million dollar in 2016; a 19.2 percent increase. Year over year profit increased by 24.4 percent, $49.99 million in 2017 compared to $40.24 million in the previous year.

In a bid to grow its client base, ISP now plans to expand the company outside of the Kingston Metropolitan Area to include branches in other densely populated towns across the island. The company also plans to introduce new loan products customized to its clients’ needs. Additionally, plans will be implemented to improve technology in order to enhance service delivery.

Currently, ISP focuses mainly on the disbursement of loans to employed persons and to small and micro-businesses, which require short-term financing at competitive rates. ISP describes the loan requirement process as simple and their service delivery as prompt.

ISP Finance Services Limited was listed on the Jamaica Stock Exchange (JSE) in 2016 and immediately saw an increase in the company’s net profit to $40.24 million. The company currently trades on the JSE at $15.00.

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The government of Papua New Guinea has announced that it will block Facebook for a month to sift out fake profiles, users who post pornography and assess the effect of Facebook on the population. Communication Minister of Papua New Guinea, Sam Basil, stated that online criminals are abusing the social media site with fake identities and the ban will allow the country to enforce the Cyber Crime Act passed in 2016.

Whilst researchers will be analyzing how Facebook is used in the country, the government will be exploring other options of its own social network for its citizens. Basil stated the ban could reveal the conclusion that people do not really need Facebook and are actually ‘better off without it.’

The date for the ban has not yet been revealed but it comes at a time when Facebook is facing extreme pressure from governments around the world. Recently, Mark Zuckerberg who acts as CEO of Facebook, had to endure grilling questions from the U.S. Senate over the misuse of data and privacy concerns involving data mining consultant firm, Cambridge Analytica Limited.

Zuckerberg was again questioned by members of the European Parliament in Brussels, last week, because of data privacy concerns. Earlier this year, the government of Sri Lanka moved to ban the social media site for one week accusing it of fueling ‘sectarian violence in the country.’ In the past, countries like: China, Iran, North Korea, Pakistan, Bangladesh and Vietnam have temporarily blocked Facebook from its populace.

Since news of the impending ban in Papua New Guinea emerged, Facebook has since reached out to the government in order to get a better understanding of their concerns.

Could Facebook’s stock price be affected by the Papua New Guinea ban?

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Premier importer and distributor of fruits, vegetables, dairy and other food products, Everything Fresh Limited, is listing on the Jamaica Stock Exchange. The offer opened today May 17 and will close on May 24, 2018. Stocks and Securities
Limited (SSL) is the lead broker for the IPO.

Everything Fresh & SSL together hosted prospective investors at the Audi Terminal on Wednesday May 9,2018 where Everything Fresh showed off their premium quality dairy, seafood, meat and produce products. Guests were treated to an exhilarating evening of figures and delectable treats curated by ace chefs Oji Jaja of Ashebre & Christina Simonitsch of Simo’s Bread and Catering’s.

The evening’s formalities included a breakdown of Everything Fresh Limited’s growth prospects from SSL’s Investment Banking Associate Matthew Williams, after which, Chairman of Everything Fresh Gregory Pullen illustrated his company’s journey from a small family owned entity to now, being a multi-billion dollar enterprise poised for expansion. Lamar Harris, Chief Executive Officer at SSL emphasized the contributions the company intends to make to brand Jamaica and the Jamaican market.

Everything Fresh Limited seeks to raise J$390 million from the share offer. They will seek to hit the $4 billion mark in sales by December 2020 – roughly doubling sales from $1.8 billion in December 2018. The influx of cash from the IPO will enable the Company to take on more large clients which will increase sales. Additionally, economies of scale as they grow will allow them to improve on their margins. The Company has a goal of attaining net margins of 7%-10%.

Courtney Pullen, Managing Director of Everything Fresh, expressed his confidence in the share offer. “We have a goal of increasing our business capacity by retaining and even improving our service to our customers, which is our hallmark.”
The firm, which currently supplies Riu Hotels and Resorts, Iberostar Hotels and Resorts, Hi-Lo Food Stores, Progressive Grocers, and Secret Resorts & Spas, will continue expansion in the grocery and tourism industries. Expansion will be achieved through increased working capital to support operations, introducing several new product lines, establishing a local meat processing facility, and, moving towards regional expansion in the Caribbean. The Company’s eye for the tourism market comes at a time when there is increased investment in tourism development from the public and private sector, making Everything Fresh primed for success as they increase capacity to deliver more products. Additionally, the Company plans to install a solar system that will assist in reducing its carbon footprint and reduce energy costs for more cost-efficient operations.

Speaking for SSL, Mark Croskery, Executive Director, SSL (Barbados) Ltd. said his confidence in the Everything Fresh IPO was based on “the tremendous track record of excellent service and professionalism on which the company has built its reputation.”
Everything Fresh will make a total of 156 million shares available, including 26.3 million shares being offered at the subscription price of J$2.50 per unit. Just about 129.7million is being initially reserved for priority application from, and subscription by, employees of the company (excluding executive directors), companies and persons that have done business with Everything Fresh on a continuous basis and whom the company considers critical to its business. Portions will also be reserved for the lead broker, as well as for employees and key clients of the lead broker.

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Fosrich Company Limited [JSE: FOSRICH] lights the way again with bright first quarter results for the period ending 31st March 2018. The company for the first time delivered a whopping JMD$30.8 million compared to JMD$15.6 million in the prior period. Moreover, this was aided by other income benefiting from foreign exchange gains.

Fosrich recorded revenues of JMD$271.8 million for its first quarter since listing, recording a decrease of 7.71 percent  when compared to the same quarter in 2017. Furthermore, this decrease in revenue was beyond the company’s control as product prices have seen some downward movements in international markets.

The Company saw a sharp increase in its net profit of 103.97 percent and an increase in its net profit margin 24.1 percent when compared to the prior year of 5.15 percent. This was aided by a gain of JMD$7.8 million from foreign exchange and benefits of tax exemption from listing on the Junior Stock Exchange.

Furthermore, the company has displayed noteworthy financial management year-to-date having cut expenses by 9.61 percent from JMD$118.6 million to JMD$107.2 million. In addition, Fosrich increased its Return on Assets (ROA) by more than 50 percent in quarter one (Q1) of 2.27 percent compared to 1.38 percent in the prior quarter.

Similarly, the company increased its Return on Equity (ROE) to 4.81 percent when compared to 3.66 percent in the prior quarter. Also, the company has deceased is Debt/Equity ratio to 0.5x from 1.6x in the prior quarter compared to 1.1x in Q1, as a result of the increase in Shareholders Equity of 5.1 percent. However, non-current liabilities have increased by JMD$274 million due to the company obtaining a new line of credit to assist with the financing of operations.

In addition, Fosrich reported a strong growth in its cash and cash equivalents for Q1 of 468.24 percent, as a result of listing on the JSE. Currently Fosrich has a Price/Earning (P/E) of 14.43x.

Fosrich is a distributor of lighting, electrical and solar energy products, partnering with global lighting companies such as Philips Lighting, Siemens and General Electric (GE) to name a few. Moreover, the Lighting industry is viable one with the increasing demand for efficiency and reducing cost of electricity through energy saving products. We at SSL strongly recommend Fosrich as a buy.

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